Florida Public Service Commission approves termination of biomass energy contract

The Florida Public Service Commission (PSC) recently approved the termination of an agreement under which Duke Energy Florida, LLC (DEF) purchased biomass energy from Florida Power Development, LLC (FPD).

The agreement, the PSC said, is no longer cost effective for DEF customers. The agreement’s termination is expected to save customer between $38 million and $59 million.

“Duke’s customers no longer benefit from the energy produced by burning waste at this biomass facility,” PSC Chairman Art Graham said. “Cleaner, more cost effective generation options are available, if warranted. In approving the termination agreement, we are keeping rates down and doing what’s best for the public interest.”

Retiring the FPD facility will reduce carbon dioxide emissions by 2.3 to 2.6 million tons over the remaining agreement term through 2034. The FPD agreement accounted for 11.7 percent of DEF’s total renewable generation.

As part of the termination, DEF will pay $105 million to FPD, recovered as a regulatory asset through the Fuel and Purchase Power Cost Recovery Clause over 16 years.

The PSC initially approved the arrangement in 2009. The 60-megawatt (MW) biomass-fired facility, located in Brooksville, came online in May 2014.